The endoplasmic reticulum consists of an extensive membrane network of tubes and cisternae (sac-like structures) held together by the cytoskeleton. The membrane encloses a space, the cisternal space (or internal lumen) from the cytosol. Parts of the endoplasmic reticulum membrane are continuous with the outer membrane of the nuclear envelope, and the cisternal space of the endoplasmic reticulum is continuous with the space between the two layers of the nuclear envelope (the intermembrane space).

Parts of the endoplasmic reticulum are covered with ribosomes (which assemble amino acids into proteins based on instructions from the nucleus). Their rough appearance under electron microscope led to their being called rough endoplasmic reticulum (rER), other parts are free of ribosomes and are called smooth endoplasmic reticulum (sER). The ribosomes on the surface of the rough endoplasmic reticulum insert the freshly produced proteins directly into the endoplasmic reticulum, which processes them and then passes them on to the Golgi apparatus (Fig. 1).

The rough endoplasmic reticulum contains protein-manufacturing ribosomes on its surface (hence its name) and transports proteins. It is connected to the nuclear envelope as well as linked to the cisternae of the Golgi apparatus by vesicles that shuttle between the two compartments.[2] The rough endoplasmic reticulum works in concert with the Golgi complex to target new proteins to their proper destinations.

The smooth endoplasmic reticulum has functions in several metabolic processes, including synthesis of lipids, metabolism of carbohydrates and calcium concentration, and attachment of receptors on cell membrane proteins. It is connected to the nuclear envelope. Smooth endoplasmic reticulum is found in a variety of cell types (both animal and plant) and it serves different functions in each. It consists of tubules and vesicles that branch forming a network. In some cells there are dilated areas like the sacs of rough endoplasmic reticulum. The network of smooth endoplasmic reticulum allows increased surface area for the action or storage of key enzymes and the products of these enzymes. The smooth endoplasmic reticulum is known for its storage of calcium ions in muscle cells.

Secretory proteins are moved across the endoplasmic reticulum membrane. Proteins that are transported by the endoplasmic reticulum and from there throughout the cell are marked with an address tag called a signal sequence. The N-terminus (one end) of a polypeptide chain (i.e., a protein) contains a few amino acids that work as an address tag, which are removed when the polypeptide reaches its destination. Proteins that are destined for places outside the endoplasmic reticulum are packed into transport vesicles and moved along the cytoskeleton toward their destination.

The endoplasmic reticulum is also part of a protein sorting pathway. It is, in essence, the transportation system of the eukaryotic cell. The majority of endoplasmic reticulum resident proteins are retained in the endoplasmic reticulum through a retention motif. This motif is composed of four amino acids at the end of the protein sequence. The most common retention sequence is KDEL (lys-asp-glu-leu). However, variation on KDEL does occur and other sequences can also give rise to endoplasmic reticulum retention. It is not known if such variation can lead to sub-endoplasmic reticulum localizations. There are three KDEL receptors in mammalian cells, and they have a very high degree of sequence identity. The functional differences between these receptors remain to be established.

Insertion of proteins into the endoplasmic reticulum membrane: Integral proteins must be inserted into the endoplasmic reticulum membrane after they are synthesized. Insertion into the endoplasmic reticulum membrane requires the correct topogenic sequences.

Disulfide bond formation and rearrangement: Disulfide bonds stabilize the tertiary and quaternary structure of many proteins.

Calcium storage: The smooth endoplasmic reticulum serves as a major storage and release site of intracellular calcium ions. This is of particular importance in striated muscles which must be able to continually contract.